1. Anyone can call him/herself a
planner.To avoid amateurs, hire a planner
who's earned special credentials (such as a Certified
Financial Planner or Personal Financial Specialist
designation) by meeting training standards or having a
certain level of experience.
2. Planning is more than
investing.
Not all planners offer comprehensive services. Some just
give investment advice or focus on one aspect of planning,
such as insurance or taxes.
3. Expand your choices.
When hiring a planner, interview at least three pros to
find the one who can deliver the services you need and who's
compatible with your style.
4. Personal references are a
good place to start - but not the last stop.
A reference from a friend or family member is a great way
to search for a financial planner. But make sure you've got
similar needs as the person who's giving the referral. Go to
groups like the
Certified Financial Planner Board of Standards and the
Financial
Planning Association for additional references.
5. Understand how your planner
is getting paid.
The three most common set-ups are: Fee-only, fee-based,
and commission-based. Fee-only planners don't get
commissions for the products they sell - fees are for the
advice they give. Fee-based planners may receive commission
on some products they sell, but most of their money comes
from a fee you pay them. Commission-based planners are paid
by the companies whose products they sell.
6. Check credentials.
Check to see if a planner's record is tarnished by
disciplinary problems or complaints. Groups that award
credentials or state agencies keep tabs on planners and can
provide help. Look for planners with advanced designations
like the CFP or PFS.
7. Get references.
Ask a planner for two or more of his clients - then
follow up and call to find out how a planner performs in
specific circumstances, such as during a financial crisis.
8. Express yourself.
The quality of a planner's advice is correlated to how
well he or she knows you. Make sure a planner asks questions
about your finances, goals, risk tolerance and philosophy.
If they don't ask, they probably aren't paying adequate
attention.
9. Know what they're selling.
Find out what financial products a planner sells and how
much he or his firm earns for making a sale. Be wary of
planners who push one product - say, one family of mutual
funds or one kind of insurance - as they may not give you
the unbiased or comprehensive advice you need.
10. Know yourself.
The best planner will take his cues from you. Before you
hire someone, identify the financial goals you want to meet,
your assets and liabilities, your risk tolerance, and
investment style. Are you self-directed or do you want
specialized help?
Looking to hire a planner?
Contact us today for a complimentary, no obligation
consultation.
Read about our fee-only,
personal financial planning services.
Other topics: What is
the CFP®
Mark,
Hiring an Insurance
Agent, Hiring an
Accountant, Hiring an
Attorney, Hiring
a Mortgage Broker,
Hiring a Real
Estate Agent
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